ACA Saved Medicare Beneficiaries $4.5B in Rx Drug Costs, HHS Says

Medicare beneficiaries have saved about $4.5 billion on prescription drugs since January 2011 because of the Affordable Care Act, HHS announced Friday, USA Today reports (Kennedy, USA Today, 9/21).

Prior to the health reform law, Medicare Part D beneficiaries paid 25% of the cost of their drugs until the total bill reached $2,830. Beneficiaries then paid the full cost of drugs until their total out-of-pocket spending reached $4,550, a gap in coverage known as the "doughnut hole."

The health reform law called for Medicare beneficiaries in 2010 to receive one-time, $250 rebates when they reached the doughnut hole. In 2011, the rebate was replaced by a 50% discount on brand-name drugs. The overhaul will increase that discount gradually until 2020, when the coverage gap will be closed (California Healthline, 8/5/11).

Beneficiaries who reached the doughnut hole have saved an average of $641 since the beginning of 2012, according to HHS. All told, the average beneficiary with traditional Medicare will save $5,000 from 2010 to 2022, and beneficiaries with high prescription drug costs will save an average of more than $18,000 over the same period (HHS release, 9/21).

Jon Blum, director of the Center for Medicare, said, "We're seeing consistent, steady savings for seniors thanks to the health care law."

Some opponents of the ACA predicted that drugmakers would pass the cost of beneficiaries' savings on to other consumers. However, so far no research has shown that, according to USA Today (USA Today, 9/21).